There has been a bit of fan-fare today regarding Wizzard’s press release about it’s Q2 2008 financial results. Both Paul Colligan and Podcasting News have highlighted the “bright” points of Wizzard’s press release. For those that think Wizzard is proof that podcast advertising is the answer I’d like to offer some context and thoughts:
- Wizzard reported gross revenues of $1,465,874 for Q2/2008 – how much is podcast advertising and how much comes from their original “core” business of speech technology? It is never defined. Don’t make the mistake of assuming it is all podcast related.
- Operating expenses for Q2 came down to $2,159,433 but things are still clearly in the red.
- Wizzard is a 12 year old company (founded in ’96) loosing millions per year.
- Wizzard makes no mention of their original business of “speech technology” in the substantive portion of their press release, it is all podcasting. What does that tell you?
- Wizzard is a public company with only an estimated $6M in gross revenues – would you invest? (You Can: WIZD)
- 3% revenue growth over Q2 2007. That is the nail in coffin. If they were in a mature industry such as the steel, oil or auto business that would be great, but an “explosive” growth segment such as New Media Advertising? You do the math.
- A reported 1 Billion downloads last year and only 13 advertisers secured by their “sales pioneers.” 13! That is 1 advertiser per 76 million downloads.
I know a lot of people see $1.4M in a quarter and think wow – that is a lot of money, but given expenses of $2.16M it is not. If they were a new startup it is one thing, but this is a “mature” public company 12 years in the making. I know some of the folks at Wizzard – they are energetic, enterprising and I have high expectations for their future accomplishments. Just make sure you read their press releases with a bit of contextual balance.
UPDATE: I had a nice conversation with Chris Spencer, the CEO of Wizzard yesterday. We probably chatted for a good 20 minutes. I’m glad we got the opportunity to meet each other, and enjoyed our exchange. I’m still looking for explosive growth in the segment. We’ll see what the future holds.
Only a neophyte would simply look at the revenue number as an indication of performance. The company lost just under $2 million in the quarter. So I don’t want to hear anything too bullish til Wizzard turns a profitable quarter. Wizzard is also holding $3 million in debt right now. So their financials are weak at best.
The stock is one to avoid in my opinion. I’d stay away based on the anemic volume (20,000 shares today) alone. There’s very little market for WIZD at this point.
Actually I was just happy with the download numbers.
Paul
Michael – does anybody think that “Wizzard is proof that podcast advertising is the answer”?
Wizzard is an interesting company exactly because it’s thinking big and taking big risks. Until they can do better than increasing revenues and cutting losses, though, they haven’t proved much.
The real mystery raised by Wizzard’s financial statement is this: What happened to Rex, the Talking Pill Bottle?
Rob, I agree. There is no real market for Wizzard stock – it is clearly in the “pink sheets” territory, i.e. it is worth what someone will pay for it – no market maker involved. While I don’t know the details, my guess is they have used stock to purchase these subsidiary companies. I am curious to see if that works out in the long run. A public company with $6M in revenue is anemic at best. There are holiday card shops that have higher gross revenues.
James: sure people assume Wizzard & podcast advertising is the answer:Tim Street for example.
Ouch!
One thing I’ve observed about you over the past couple years is that you’re talented at looking at situations/organizations with a sound business perspective.
Sometimes in ‘new media’ where many of us are creative types (and frequently optimists and dreamers), well… sometimes we hear what we want to hear — as the cliché goes.
That said, obviously nobody knows what the future holds for Wizzard, but since I’m familiar with the company and some of the staff, I too wish them great success.
As we all know young companies need time to grow, just like children. If you are indeed following Wizzard than you must read the financials text to see where the revenues are really coming from. The majority of the revenue increases are from the Pill Bottle and the Health Care sectors. Does that mean they aren’t performing with the ads, absolutely not. Keep in mind when you look for growth this companuy is starting fresh as an ad site and with a new ad medium in the internet industry. Don’t buy the stock because they did o.k. in the second quarter but rather buy because the future of on-line advertiseing is podcasting and they are the largest network in the world. If you find this last statement hard to believe then I can send you a link so that you can watch the same video I did where the V.P. of Google tells the reporter that podcasting is going to be “thee medium for on-line ads” this is what Google os now….. email me otcbb62@yahoo.com BY THE WAY IT IS NOW WZE on the AMEX and has several major institutions buying the stock (Goldman Sachs, Barclay’s,Bnk of New York and Citibank to name a few) think they might know a little more than we do???